Innovators' Day - Innovate, Protect & Prosper - 16 July 2014

Wednesday 16th July
2014
Welcome to:

COLLABORATE TO
INNOVATE
JONATHAN HAGUE
VICE PRESIDENT OPEN INNOVATION
UNILEVER
International Festival
of Business
Innovators Day
July 2014

AGENDA
About Unilever
Role of Innovation In Unilever
Open Innovation – Unilever’s model
In Summary
Handling IP

ABOUT UNILEVER
Unilever is one of the
world’s leading suppliers
of fast-moving consumer
goods.
Our products are
sold in over 190
countries and used
by 2 billion
consumers every
day.

OUR COMPASS STRATEGY
Our vision is to double the
size of the business,
whilst reducing our
environmental footprint
and increasing our
positive social impact.

FAST FACTS - 2013
€1 BILLION
INVESTED IN R&D WORLDWIDE
190
COUNTRIES IN
WHICH OUR
PRODUCTS
ARE SOLD
TURNOVER OF
€49.8
BILLION
AT END OF 2013 EMPLOYEES
AT THE END
OF THE YEAR
174,000
EMERGING
MARKETS
NOW
REPRESENT
57%
OF TURNOVER

THE UNILEVER SUSTAINABLE
LIVING PLAN
We have long been working and reporting
on our impact on society and the
environment. Our Sustainable Living Plan
brings together all this work and sets
many new targets.
Our Sustainable Living Plan will result in
three significant outcomes by 2020.
1. We will help more than 1 billion
people take action to improve their
health and well-being.
2. We will halve the environmental
impact of the making and use of our
products.
3. We will source 100% of agricultural
raw materials sustainably.
HELP
1
BILLION
PEOPLE IMPROVE
THEIR HEALTH
& WELL-BEING
HALVE
ENVIRONMENTAL
FOOTPRINT OF
OUR PRODUCTS
SOURCE
100%
OF AGRICULTURAL
RAW MATERIALS
SUSTAINABLY

THE UNILEVER SUSTAINABLE
LIVING PLAN
Greenhouse
Gases
DISPOSAL
1%
DISTRIBUTI
ON
/ RETAIL
2%
RAW MATERIALS
26%
CONSUMER USE
68%
MANUFACTURE
3%
Water use
WATER USED BY CONSUMERS
IN WATER-SCARCE COUNTRIES
Waste
PRIMARY
PACKAGING
54%
SECONDARY
PACKAGING
13%
WATER WE ADD
TO THE
PRODUCT
1%
WATER USED IN SOURCING RAW
MATERIALS
50% 49%
+ +
LEFTOVERS
34%
MATERIALS
RECYCLED,
REUSED OR
RECOVEREDX%
-

SCALE AND GEOGRAPHICAL REACH
EUROPE
€20.1 billion turnover
5.0% underlying volume growth
40% of group turnover
ASIA, AFRICA, CENTRAL &
EASTERN EUROPE
EUROPE
EUROPE
EUROPE
THE AMERICAS

CATEGORY HIGHLIGHTS IN 2013
Turnover: €8.9 billion
Underlying sales growth: 8.0%
PERSONAL CAREFOODS
REFRESHMENTHOME CARE

OUR €1 BILLION BRANDS
Home Care
Refreshment
Foods
Personal Care
14 Unilever brands have a turnover of €1 billion or more

UNRIVALLED MARKET POSITION IN
EMERGING MARKETS

ROLE OF
INNOVATION IN
UNILEVER

INNOVATION A KEY PIECE OF THE
GROWTH
STRATEGY

DRIVING INNOVATION AT SCALE IS
NOW CRITICAL
2005 2013
5,000 600
Number of innovation projects
TURNOVER
INNOVATED
EACH YEAR
33%

NEW TECHNOLOGY IS DRIVING
DIFFERENTIATION

INTELLECTUAL PROPERTY
UNDERPINS INNOVATION
€1 BILLION
INVESTED IN R&D WORLDWIDE
80%
1070
DESIGN FAMILIES
HELD
PATENT
FAMILIES
2805
AT END OF 2013
NEW FILINGS
PER YEAR
250 - 350
REGISTERED
PATENTS
22,000
OF DISCOVER PORTOLIO
DEPENDS ON PARTNERSHIP

OPEN INNOVATION TEAM MANDATE
Strategic
Science
Group
Categories
HC, PC, Foods, Refreshments
Program
Owners
Own OI
Open
Innovation
CFC
Drives
capabilities
Scouting
Deal Architecture
Cross Unilever Strategic Partnerships
IP Agreements Processes and IT
Training
New Capabilities – Devices, Social Business Innovation

OPEN INNOVATION PROCESS
Manage Manage delivery via the relationship.
Want
Defining the targets.
Which capabilities do we need to deliver
the innovations ?
Find
Ideas and wants Management in
relation to defined needs
Scouting for capability providers
Get
Define business goals of alliance and likely
alliance type.
Approach & build deal quickly or separate
Unilever’s basic
framework is externally
Recognised
In place since 2007
Refined for our needs

OPEN INNOVATION IMPACT
0
20
40
60
80
100
2009 2010 2011 2012 2013
% Program deliverables dependent
on open innovation
Source – DMUU Snapshots
We are OI enabled now
55% of INNOVATION pipeline value is from Open Innovation
OIEnabled
55%
No OI
45%
iTO growth (2015-2018) reliant on OI
(risk adjusted)

OPEN INNOVATION ALLIANCE
STRATEGY
Our HUBS
PORTS in
Hotspots
Core
Ecosystem
Science Grid
around our Hubs
Partner to
Win
Partners
Wider world of science and
technology
Global Scouting Partners Collaborate To Innovate
Portal
Colworth House
Shanghai
Bangalore
Trumbull
Vlaardingen
Port Sunlight

PARTNER TO WIN
CO CREATING WITH SUPPLIERS
Targeted Encapsulation
Unilever
IP on fabric
molecular surface
recognition
Partner
IP on Fragrance
Capsules
Fragrance Design
Winning high performing
fragrance encapsulates

HANDLING IP IN STRATEGIC SUPPLIER
ALLIANCES
Framework agreements, Progressive business
conducive approach
Flexibility on Ownership of IP
IP Ownership Split according to who can best
maximise protection
Both Parties Retain Ability to Exploit IP if
Project Terminated
Joint Innovation and Patenting Activity with Strategic
Suppliers to maximise value to both parties

SCIENCE GRID – BUILDING FUTURE
CAPABILITIES IN PARTNERSHIP
£16 million
investment over
10 years (£ 4M
Unilever)
2007 2013 2015
Microbiorefinery
£ 2.83 Million
awarded by UK RGF
Open
Materials Innovation
Factory
£65 M New Build
£ 11 Million awarded
by HEFCE to
Liverpool
Radiotracer
Laboratory
Specialist unique
facility transferred
into Liverpool
Open to public
research also
iHT formulation Centre
Liverpool Science Park
Underway
£ 1.7 Min awarded by
RGF
2014 2016

THE MATERIALS INNOVATION FACTORY
NEXT GENERATION OF HIGH THROUGHPUT MATERIALS DISCOVERY
FORMULATION CHARACTERISATION AND ANALYTICAL SCIENCE

WHY SO INTENSE WITH LIVERPOOL ?
PROXIMITY MATTERS
T.J. Allen
Managing the Flow of
Technology (1977)
“We do not keep separate sets of people,
some of which we communicate in one
medium and some by another. The more
often we see someone face-to-face, the
more likely it is that we will telephone the
person or communicate in some other
medium”.
Allen & Henn (2006)
Right Space + Distinctive Equipment + Skilled People

PROXIMITY MATTERS
BY 2016 UP TO 250 UNILEVER PEOPLE
WILL WORK IN UOL EVERY DAY
Port Sunlight
Materials Innovation
Factory

SAME FACILITIES – DIFFERENT
OUTCOMES
NO IP CONFLICT !
Impacts - Unilever
10 x Speed of Discovery
Supporting large R&D
pipeline value across six
categories
Impacts – Liverpool
Built Liverpool’s Research
prowess
Porous organic materials.
From concept (2008) to
leading world position (2011)
in less than 3 years , 20
publications
Not possible with standard
approach

PORTS – HARNESSING HOTSPOTS
BOSTON
Leading Edge Academic and Vibrant SME community spear headed by MIT and
Harvard
( MIT alumni creates the11th largest economy in the world)
Robust Financial Investment with Over 100 VCs and Top Five NIH Funds;
Gravitation Center for Pharmaceutical and Health Care Industries
A Major Hub for Manufacturing and Defense Researches

PORTS - NEGOTIATING WITH START UPS
AND SME’S – SPECIAL SKILL AND
PATIENCE
Area Unilever SME
IP
Ownership
Split – Own
arising IP we pay
for
Own it ALL
Processes Deep, lengthy,
onerous
FEW, nimble
Culture Cautious, € Billion
brands at stake
Daring – Returns
to make, ideals to
achieve
Tech
Valuation
Realistic in
context of market
Mostly unrealistic
and overpriced
Motives Long term,
sustainable
innovation
Quick win / exit
Exclusivity Desired /
Demanded
Keep Options
Open

COLLABORATE TO INNOVATE PORTAL
> 2000 SUBMISSIONS SINCE LAUNCH

UNILEVER MARKETING FOLLOWING
THE LEAD WITH A VIRTUAL
COLLABORATION TOOL

MAJOR “WANTS” - EXAMPLES
Category Want
Foods Clean label in Foods – preservation and manufacture without
chemistry
Next gen foods processing - Elimination of all foods waste and using
all foods components
Refreshments Routes to > 70% energy reduction in Ice Cream cold chain
Low fat zero cal great tasting ice cream / ice cream from beyond diary
without taste / sensory compromise
Dramatic increase in tea yield from tea process without taste
compromise
Homecare 50% improvement in water reuse / reduction in Laundry
Superior cleaning of tough stains at low temperature
Zero chemical / zero VOC air purification and freshness
Personal Care 50% improvement in water reuse / reduction in bathing
Hair transformation (straightening) technologies with benign chemistry
New Technologies for deep dermal / follicular delivery
Premium / high performance products for PC – holistic beyond just

COLLABORATE TO INNOVATE PORTAL
THE LEGAL BIT

IN SUMMARY
Innovation crucial to delivery of growth, profitability
and the sustainable living plan
IP Underpins differentiation and is the currency of
open innovation
Open innovation is embedding in the company –
much IP is co-created or accessed rather than owned
We have learned flexibility. Different partner strategies
require different tailored approaches to IP
management

Intellectual Property
Chris Smith
Business Outreach & Education

Help and Advice on IP
=
http://www.ipo.gov.uk/ip4b

IP Baseline Survey
96% of UK businesses do not know the value of their Intellectual Property
Rights
Only 11% of UK businesses know that disclosure of an invention before
filing will invalidate a patent.
74% of UK businesses could not correctly identify the owner of copyright
when using a subcontractor
Only 4% of UK businesses have an Intellectual Property policy

What is intellectual property?
Intellectual
Property
Patents
Trade
marks
Registered
designs
CopyrightConfidentiality
Trade
Secrets
Plant
Varieties

Intellectual
Property
Patents
Trade
marks
Registered
designs
Trade
Secrets
Plant
Varieties
Trade marks

What is a Registered Trade Mark?
Any sign which is capable
of being represented graphically
Any sign which is capable of
distinguishing the goods or services
of one undertaking from another
“A Badge of Origin”

Domain names
Trade Mark registration is not company
name or domain name registration
A domain name may be
registered as a Trade Mark
Incorporating another’s RTM into your domain
name or meta-tag may be an infringement

UK Applications
Fees:
Application fees: £170 – Includes one Class
Additional Classes £50 each (up to 45 Classes)
Timeline:
Examination within 2 months of filing
Registration (unopposed) in 5 months

Trade Mark Registration Overseas
Paris Convention - six months priority
OHIM – Community Trade Mark
e-filing fee €900
WIPO - Madrid Protocol

Intellectual
Property
Patents
Trade
marks
Registered
designs
Trade
Secrets
Plant
Varieties
Copyright

1.Literary Works – All works expressed in print or writing
2.Dramatic Works – A work capable of being performed
3.Musical Works – includes melody, harmony and rhythm
4.Artistic Works – A work of artistic craftsmanship (not quality)
Copyright
5.Films – Moving images produced by any means
6.Sound Recordings – From which sounds can be reproduced
8.Published Editions – typographical arrangements
7.Broadcasts – transmission of visual images, sounds or other

Who owns Copyright?
Usually the first creator or author...
…or their employer if produced in the
ordinary course of their employment
However, a contractor will retain ownership
unless their contract is explicit to the contrary
Even if the creator sells their rights, they have
‘moral rights’ over how their work is used

Intellectual
Property
Patents
Trade
marks
Registered
designs
Trade
Secrets
Plant
Varieties
Registered
designs

Registered Designs
Protects shape or configuration (3-D)
and/or pattern or ornamentation (2-D)
No protection for function, materials
or technology of manufacture
No protection when form is dictated
by function (ie: no design freedom)

Multiple Applications
£60 for first design
(£40 application + £20 publication)
£40 for subsequent designs
(£20 application + £20 publication
Renewal fees every 5 years
Maximum term 25 years

Intellectual
Property
Patents
Trade
marks
Registered
designs
Trade
Secrets
Plant
Varieties
Patents

Criteria for ‘patentability’
Patents are for “technological innovation”, though the
Patents Act 1977 fails to define the word “invention”
Inventions must be new - not known
anywhere in the world prior to the filing date
Inventions must have an ‘inventive step’ - not
obvious, a simple adaptation or combination
Inventions must be industrially applicable
and have a ‘technical effect’

Patent fees
Application fee – £30 or £20 (Electronic filing)
Search Fee - £150 or £130 (Electronic filing)
Examination fee - £100 or £80 (Electronic filing)
Renewals
5th Year - £70
10th Year - £170
20th Year - £600

www.ipo.gov.uk - 0300 300 2000
Information@ipo.gov.uk

Thank You
Chris Smith
christopher.smith@ipo.gov.uk
@The_IPO

“Innovation in Practice”
Clemens Wangerin
Chief Operating Officer
Starship

INNOVATOR’S DAY 2014
Case Study: Innovation in
Practice
Clemens Wangerin
The Starship logo is a registered trademark of
Starship (UK) Limited.

Introducing Starship
• A Digital Entertainment & Technology company developing
and publishing wholly-owned, original IP
• Founded in 2013 by Martin Kenwright, previously CEO and
founder of Digital Image Design (1989 - 1999) and Evolution
Studios (1999 – 2007)
• Award-winning core team with collective experience in
multiple sectors and over 69 entertainment product releases
with multi-million £ in retail software sales
• Based in the Baltic Triangle, Liverpool
Winner Racing Game of the Year:
Motorstorm
Milia d’Or
Nomination Best Sports Game:
Motorstorm
AWARDS
Winner Best Handheld Developer:
Studio Liverpool / Wipeout Pure
Best Action Game:
Wargasm
Starship (UK) Ltd – Innovator’s Day 2014 – Case Study: Innovation in Practice

What is Innovation?
“The process of translating an
idea or invention into a good or
service that creates value for
which customers will pay.”
Source: Businessdictionary.com

Types of Innovation
• Little innovation (little i)
Evolutionary, continuous, dynamic changes through
incremental advances in technology
• Big Innovation (Big I)
Revolutionary changes which are often disruptive
and new

The Key Components
INNOVATION
AUDIENCE
TIMING
RELEVANCE
Themes, settings or functionality rel
to the intended audience
A tightly defined demographic
of appropriate size
Market introduction at best possible time

Innovation in
Practice

Forget Me Not is a registered UK and EU trademark of Starship (UK)
Ltd. Patent pending.
®

The Market
Over 200 specialist magazine
16.2m cookery/food/drinks
books were bought for
£128m in 2011
Popular TV shows with
millions of viewers
24/7 TV Channels
2,199 apps with ‘cooking’ in
the title

Market Disruption
CyberCook aims to unite the entire cooking sector
with the first truly interactive cookery platform.
Cook Books
(19th
Century)
TV /
Multi
Media
(20th
Century)
Entire Cooking Sector
(Retail, Celebrity Chefs, Consumer Brands, White Goods,
etc.)
CyberCook
Platform
(21st
Century)

The Product
Work In Progress Work In Progress
Work In Progress
CyberCook: the next-gen eco-system for cookery
Featuring the world’s first hyper-realistic and time sensitive
cooking simulation
Work In Progress
© Starship (UK) Ltd 2014. Do not distribute. © Starship (UK) Ltd 2014. Do not distribute.
© Starship (UK) Ltd 2014. Do not distribute.

The journey has begun …
… join
us.
www.starship-group.com
Clemens Wangerin
The Starship logo is a registered trademark of
Starship (UK) Limited.

To patent or not to
patent
Robin Bartle Chartered and
European Patent Attorney
robin.bartle@bartleread.com

Questions
www.bartleread.com
These are presentation slides only and neither the information contained in these
slides nor the presentation constitute legal advice.
© 2014 Bartle Read Limited
?
?

www.forresters.co.uk
Patentand TradeMarkAttorneys
“AMidsummerNight’s Nightmare”
Ross Walker

Introduction
• Inventorship/Ownership
– If it all goes wrong; it’s a nightmare!!
• Inventorship
– Ownership flows from Inventorship
• Ownership
– Employee/Employer relationship
– Contractual agreements e.g. Universities and Consultants
• Challenging ownership!

Inventorship

Inventorship
• Who is the inventor?
– “the actualdevisor oftheinvention”
– Can bemore than oneinventor
• Teams of people contributing to an invention
– Imperative that you get it right!

Inventorship
• Who is the “actual deviser” ofthe invention?
• IDA Ltd & Others vs. TheUniversity of Southampton
– [EWCA] Civ 145

Inventorship
Thefacts:
“Unveiled: cockroachtrap to beat the world”
“Thecreaturesareluredontothebridgeofthewoodenboxbyabait.Whentheirfeet
alightontheelectrostatic talcumpowderwith whichitisdustedtheyslipontoafly
paperandmeettheirend”
Source : THETIMES

Inventorship
• Thefacts:
– Mr X at IDA saw the article
– Called the Professor behind the “electrostatic trap”
• MrXspecialist in magnetic powders realised that:
– Electrostatically charged powders lose charge over time
• especially in humidconditions
– Wondered whether magnetic powders would work instead
– Magnetic powders not lose their “stickiness”

Inventorship
• Thefacts (cont.):
– The University tried the idea i.e. “verified it”
– It worked!
– They filed a patent with no reference to Mr X or IDA
• TheCourt ofAppeal:
– Identify the “heart” of the invention
– Mr X come up with the use of magnetic powders
– The University had merely verified the idea through routine experimentation

Inventorship
Conclusion
• Identify heartof the invention
• Could bethe person whocameup with the idea
• If additional work is required to practice invention, then other parties could be entitled
to benamed as inventor
“Those whocontribute enoughinformation by wayofnecessary enablement tomakethe idea
patentable would countas“actual devisors”, havingturnedwhatwas“airy-fairy”into that
whichispractical”

Ownership

Ownership: employee/employer relationship
Dictated by statute - two scenarios
• Scenario1
– Invention was made in the course of normal duties or specifically assigned duties; and
– Reasonably expect the invention to arise from those duties
– Enquiry is started with reference to the contract
• Scenario2
– Senior management
– Employee has a special obligation to further employer’s interests

Ownership: employee/employer relationship
• Top tip!
– Keep records: list duties
– Keep the records updated
• You cannot circumvent the statute by contract
– Employee’s rights cannot be diminished!
• Employee compensation
– If invention of “outstanding benefit”
– The employee can claim compensation
– Latest you can apply is one year after patent has ceased

Ownership: By way of agreement
• Non-employee/employer relations e.g.
– Universities
– Collaborating consultants
• Agreement must bein force on making the invention
• Top tips!
– Make sure agreement deals with IP ownership!
– Make sure confidentiality dealt with as well!

Challenging ownership!

Challenging ownership
• What?
– UK and Foreign patent applications
• Up toforeign courtstoenforce
– Granted UK Patents
• When?
– Applications: anytime
– Patents
• Twoyearsaftergrantunless theownerknew!
• Where?
– The Comptroller

Challenging ownership
• Thecase
– The onus is on applicant to prove they are a deviser
• Remedies
– The Comptroller has widest possible discretion
• Addas owner:soleor joint
• Grantlicence
• Refile

Thank you
rwalker@forresters.co.uk
www.forresters.co.uk : @ForrestersIP

All’s well that starts well
Leslie Prichard
Patent Attorney
WP Thompson

Overview
• How to tell you have an invention
• Getting the ball rolling: preparing and filing
the application
• Overview of the patent application process
• Overseas protection: when, where, how,
why!

How to tell you have an invention?
• Don’t dismiss too lightly
• Different from what’s already known
• Novelty – the bare minimum
• Does it do something that related products
(past or present) are not able to do?

• Compared to what’s already described:
• Less expensive
• More efficient
• In fewer steps or fewer components/smaller
amounts
• With less user effort (e.g. it is easier for the
customer to use)?

• Compared to what’s already described (cont’d):
• … gives better performance
• … gives better accuracy
• … exhibits better reproducibility
• … produces less waste/more environmentally
friendly
• … is faster (e.g. a faster curing adhesive) or slower
(an adhesive with more open time)?

• Does it solve a problem?
• Is there technical literature that suggests that
what you tried should have failed?
• Are your co-workers surprised that the product
works?
• Would it give you a competitive advantage?
If the answer to any of these questions is “YES” … you
should consult a patent attorney

Getting the ball rolling…
• So that your patent attorney can either assess the idea
for patentability and/or draft a patent application to
maximise the scope of protection … it is really
worthwhile documenting your invention correctly
• if possible … capture your invention in a document that
highlights five themes
• This will help your patent attorney to understand the
invention and to grasp the differences between your
invention and what is already known

Documenting the invention
• 1. An overview of the invention and how it works
• What is the actual invention?
• Is it an article, a chemical composition, a new method of
doing something?
• How did you make it or do it?
• How did you test it to show that it solves the problem?
• (Ideally 2 or 3 concise sentences that describe and point out
the novel features of the invention)

• 2. Background or “setting the stage”
• What is the technical problem which has been solved?
• How have others tried to solve this problem in the past?
• What was wrong with their solutions?
• (Summarise any background information related to the
business and technical aspects of the invention)

• 3. Explanation of the business impact
• What is the business opportunity (£££)?
• Increase sales?
• Protect current business?
• Why do need to obtain a patent?

• 4. Assessment of the state of the art
• Description of today’s solution to the problem – products,
journals, websites
• What patents are there today?
• Searches: esp@cenet or more in-depth studies?
• (Identify the prior art by listing document numbers and titles
and a short factual statement about what they disclose)

• 5. Detailed Description of the Invention
• Data
• Tables
• Figures
• Graphs
• Photographs
• (A description of your apparatus or method. Document the
details of the experiments which illustrate the examples of
the invention. Include figures, photos, tables, graphs, test
methods, materials, etc.)

The application process
• Once the draft application has been reviewed and
approved, it can be filed at the UK IPO
• Deadlines!
• Clock ticking!
FILE
APPLICATION
THE
PRIORITY
YEAR
SEARCHES EXAMINATION
GRANT

• Sensible to request at the outset
• UK IPO or EPO official search
• Review at this stage
• May prompt re-think or abandonment
FILE
APPLICATION
THE
PRIORITY
YEAR
GRANT

• Before the filing anniversary (the “priority year”)…
o Can expand disclosure (but …)
o Not later – added matter rule
o Foreign filings
o International (PCT) applications
FILE
APPLICATION
THE
PRIORITY
YEAR
GRANT

• UK IPO’s assessment: patentable?
• Amend and argue (feedback from you)
• Different offices, different problems
• Numerous examination reports
FILE
APPLICATION
THE
PRIORITY
YEAR
GRANT

• Renewal fees payable after grant
FILE
APPLICATION
THE
PRIORITY
YEAR
GRANT

Seeking foreign patent protection
• Most (but not all) industrialised countries are party to an international
convention (“the Paris Convention”) enabling you to file patent
applications in those countries within one year of the filing date of
your United Kingdom application and thereby effectively backdate
such applications to the filing date of the United Kingdom application
• Generally speaking, you will have one year from the filing of your
United Kingdom application in which to file foreign applications

Foreign patent protection:
separate applications in each country
• Foreign patent applications can be filed separately in
each country where protection is desired
• Need to instruct local attorneys
• Prosecution costs can be substantially greater than the
filing costs!
• Issue (registration) fees, and annual renewal fees are
payable in most countries to keep the patent protection
in force

International (PCT) application
• Proceeds as a single application which can be effective in a large number of
PCT contracting states (currently 148)
• The main benefit obtained by PCT is that it effectively buys time to keep
your options open for an extra 18 months
• An international (PCT) application does not proceed all the way to grant as
a single application, but instead splits up into a series of separate patent
applications in each designated patent office. Each application is then
completely independent of the others and undergoes whatever search and
examination procedures are usually followed in the relevant patent offices.
• This “split”, called “entry into the national phase”, takes place 30 months
after the priority date of the application. The “priority date” is the earliest
filing date claimed, usually the date of the UK application on which the
international application is based
• Prosecution costs are same as for separate applications

European patent application
• If you wish to apply for patent protection in several European countries there is an
alternative to filing on a country-by-country basis
• By virtue of the European Patent Convention (EPC) it is possible to file and prosecute
a single application at the European Patent Office (EPO) effective in as many as 41
European countries
• A European patent application proceeds as a single application until a European
patent is granted, whereupon it splits into a “bundle” of separate, independent patents
in each of the chosen countries
• All proceedings can be conducted in English until a patent is granted. At the grant
stage, some countries require a translation of the patent specification to be filed in a
national language for the patent to be effective
• If patent protection in several European countries is required, it is usually more cost-
effective to file a European patent application rather than to file separate national
patent applications
• The main disadvantage of a European patent application is that the applicant is
“putting all of his eggs into one basket” – if the application is refused then it is refused
for all countries

Questions?
Our Liverpool office is now located at:
1 Mann Island T +44 (0) 151 236 6688
Liverpool F +44 (0) 151 236 8155
L3 1BP E lsp@wpt.co.uk

Steve Kuncewicz
Head of Intellectual Property
Bermans

Private & Confidential. Not for distribution.
©DWF LLP 2012 www.dwf.co.uk 127

©DWF LLP 2012 www.dwf.co.uk
Go further
Pirates, copycats, look-a-likes and
counterfeiters - How to enforce against
infringements
Name: Andrew McGregor
Solicitor – IP/Commercial Litigation
Date: 16 July 2014
Doc: 35772106

Enforcement – Trade marks

• Badge of origin
• Sign, word or logo
• A trade mark must be:
– distinctive
– not descriptive
– capable of graphical representation
– not customary in the trade
– not a shape resulting from the nature of the goods themselves
130

• Registered trade marks:
– UK national trade mark
– Community trade mark
• Unregistered trade marks:
– Arise automatically provided you can demonstrate substantial use and
goodwill in the mark
– Mark the sign “TM”
• Relevant legislation
– Trade Marks Act 1994 and Community Trade Mark Regulation
131

• Nature of infringement
132
Are the marks the
same/similar
Are the goods to which
the marks relate the
same/similar
Scope for infringement?
Same Same Yes
Similar Same Yes – provided there is scope
for confusion
Same Similar Yes – provided there is cope
for confusion
Similar Similar Yes – provided there is scope
for confusion
Same/Similar Same/Similar/Dissimilar Yes – provided earlier mark
has reputation, there is use

What constitutes infringing use
• The use of the infringing mark is in the course of trade
• The use is in relation to goods and services
• There is no consent from the trade mark proprietor
• The use affects, or is likely to affect, the functions of the trade mark
Infringement by use of an identical mark for identical goods/services
• Are the marks in question identical visually, aurally and conceptually
• If not, does the use of the mark in question give rise to a likelihood of
confusion
133

Assessment of confusion
• There does not have to be evidence of confusion
• Likelihood of association
• Is there a distinctive reputation
• Overall assessment of the impression given by the marks
Reputation
• If unable to establish a likelihood of confusion, does the trade mark have a
reputation in the UK and use of the mark in question, being without due
cause, takes unfair advantage of, or is detrimental to, the distinctive
character of the repute of the mark.
134

Examples of infringement using the an identical mark
• Alternative ‘unofficial’ goods
• An unauthorised reference
• Counterfeiters
• The Internet
- Meta-tagging
- Keyword advertising
- Domain name ‘cyber-squatting’
135

Examples of infringement using an identical/similar mark with
similar/identical goods/services
• A direct competitor uses a sign similar to the established mark
• A non-competitor uses a sign which is the same as the established mark
136

What can I do?
• Registration and renewals
• Consider registering domain names and keywords
• Actively monitor the market place
• Enforce your rights – beware of unjustified threats
• Develop clear strategies for brand and reputation management along with a
clear enforcement policy
• Engage trade mark attorneys and solicitors
137

Unjustified threats
• A threat which cannot be justified later at court - anything more than notification
of the existence of a trade mark can form the basis of a threats action
• If such a threat causes loss, the person making the threat and their legal
advisors may be liable
• A threats action can be brought by a third party (not just the recipient) if they
are/or are likely to be adversely affected i.e. a customer
138

How can I avoid infringement?
• Don’t use the same or similar marks to a competitor
• When choosing a name do an internet search of the proposed name to make
sure no one else is using it
• Bear in mind that it is an infringement of a trade mark to use not only the same
mark in relation to the same goods, but also a similar mark in relation to similar
goods
• If you are serious about adopting a new mark, a trade mark agent can carry out
a full search to identify any issues – speak to a solicitor or trade mark attorney
• Make a record of your pre-name selection process
139

Our firm is driven by its core Values which focus on:
140
Values
Our Clients Our People Our Community Our Environment

DWF is the business law firm with industry insight.
Our legal experts combine real commercial understanding
and deep sector knowledge to help clients anticipate issues,
create opportunities and get the outcomes they need.
We’ll deliver the results that help you go in the right direction –
wherever you are.
Birmingham Glasgow London Preston
+44 (0)121 572 8500 +44 (0)141 228 8000 +44 (0)207 645 9500 +44 (0)177 255 6677
Coventry Leeds Manchester Teesside
+44 (0)247 622 8734 +44 (0)113 261 6000 +44 (0)161 603 5000 +44 (0)164 262 3400
Edinburgh Liverpool Newcastle
+44 (0)131 226 5541 +44 (0)151 907 3000 +44 (0)191 233 9700
www.dwf.co.uk
Go further°
©DWF LLP 2012
DWF LLP is a limited partnership registered in England and Wales with registered number OC328794. The content of the Regulatory
and Licensing
Insert does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific
circumstances.

Pirates, copycats, look-a-likes and counterfeiters –
how to enforce against infringements
• Patents and Design Rights
Colin Bell, Brabners LLP
16 July 2014

Registered Design Right Example

Pirates, Copycats, Counterfeiters and
Look-a-Likes

Enforcement Strategy
– What are your triggers
– Territory
– Different infringers – pick your battles
– Probability approach – chances of success
– Financial impact
– Different dispute routes
• Trading Standards
• Regulatory Bodies
• ASA
• Police
• FACT

Avoid Litigation
• Litigation
– Too expensive
– Too slow
– Too uncertain
– Too incomprehensible (especially legal speak in decisions)
– Too adversarial
Lord Chief Justice (Lord Woolf)

Strategy – Do Nothing (smiling)

Strategy - Settle
90% of all lawsuits are settled without trial

Strategy – Court Proceedings
Photograph by Mike Peel

Strategy – Court Proceedings - IPEC
• Streamlined IP litigation procedure
• Intellectual Property Enterprise Court (IPEC)
– Written pleadings
– Full but concise statements of case
– Statement of Truth
• Procedure up to trial
– 6-10 wks for defence
– 2 wks for reply
– CMC (limit disclosure, x-examination, experts)
– 1-2 day trial
• Costs
– Recovery limited
– Overall and stage caps
• Damages
– £500,000

Strategy – Court Proceedings

Litigation Strategy
• Litigation – Points to keep in mind
– Commercial objective
– Budget
– Beware
• Dangerous litigants
• New Law
– See it from the other side
– Who has more to lose – what has the other side got to lose
– How much money has the other side got
– Preliminary Injunctions – act fast
– Litigation / alternative dispute resolution (mediation / arbitration)
• Treat as contentious negotiations (a means of reaching a commercial
objective) – not just about winning and losing – settlements may be a
“successful outcome”
• Analyse Cost / Potential Benefit / Potential Loss / Strengths /
Weaknesses / Likelihood of success or failure

Defences
• Entitlement
• Invalidity
– Not New or Inventive (Patents)
– Insufficiency and added matter (Patents
– Not New or of Individual Character (Designs)
– Must Fit or Must Match (Designs)
• Prior Rights and Prior Use
• Non Infringement
– Doesn’t include a feature of the claims of the patent
– Not substantially similar, gives a different overall impression (designs)
– Not copied (unregistered designs)
• Consent
• Exhaustion of Rights

Famous Patent Case Example
Dyson v Hoover

Example Patent Case – Spare Parts
Shütz v Werit (Intermediate Bulk Containers)

Example Design Right Cases
Apple v Samsung
J Choo v Towerstone Ltd

Pirates, copycats, look-a-likes and counterfeiters
– how to enforce against infringements
• Patents and Design Rights
Contact: Colin Bell
Commercial and Intellectual Property
Partner
Telephone: 0151 600 3281
Email: colin.bell@brabners.com
Website: brabners.com
brand-protection.brabners.com
Twitter: @BrabnersIPCom

Turning Innovation into a Commercial
Success

MC Vanguard Corporate Finance - Value Building 176
Successful innovation within a
business should be a source of:
• Greater profit
• Increased capital value
But this doesn’t happen by
accident

177
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
Sainsburys Microsoft Capita
Profit
Variable Costs
Fixed Costs
It’s Not What You Do … (Well Actually)
MC Vanguard Corporate Finance - Value Building
3 very different business models

178
Selected Profit Growth Strategies
Sainsburys:
• Grow volumes
• Reduce operating costs
• Innovation in format – smaller store
• Data innovation – customer loyalty
Microsoft:
• Product innovation
• Leadership in cloud based services
Capita:
• Target growth markets
• Enhance & diversify services through acquisitions
• Business format innovation

179
SME Examples
Printing Company - Terminate unprofitable customers
Engineering Company – Process innovation - 24 hour operation
Equipment Re-seller - Switch to higher margin manufacturer
Software Company - Acquire additional products within similar target
market
Technology Installer – Grow recurring income

180
Profit Improvement Process
1. A clearly understood business model
2. Develop a structured plan to grow, based on the model
3. Management information, not just management accounts

181
The Business Model
Answers the question:
“How do we plan to make money?”
Sets out:
 What do we sell?
 Who do we sell to?
 Why do they buy from us?
 How do we sell?
 What resources does the business need to make these sales?

182
Profit Improvement Plan
Answers the question:
“How do we make MORE money?”
Sets out:
 How will we sell more to both existing and new customers?
 Where can we increase prices?
 How can we reduce resource costs?
 What can we stop doing?
Innovation should be a major part of the profit
improvement plan

183
Management Information
Answers the question
“Are we delivering the plan ?”
• NOT JUST MANAGEMENT ACCOUNTS
• Measure what matters to the profit improvement plan
Some examples:
 Gross profit by customers or contract
 Delivery cost by customer
 Enquiry conversion rates
 Sales cost per new enquiry
 Overtime costs
Do we understand where
we make money and
where we lose?

MC Vanguard Corporate Finance - Value
Building
184
Sometimes less is more…
0
50
100
150
200
250
300
1 2 3 4 5 6 7 8 9 10
Profit
Customers
Sales

Growing Business Value

186
Growing Business Value
Price/Earnings Ratios
Sainsbury’s: 8 x Earnings
Microsoft: 16 x Earnings
Capita: 40 x Earnings
SME Trade Sale valuations are typically based on multiples of 3 to 8 times maintainable
earnings.
The capital value of £100,000 growth in maintainable profits is £300,000 to £800,000
plus.

15/07/2014
MC Vanguard Corporate Finance
www.mcvanguard.co.uk
187
Moving the Multiple – 12 Points that Matter
Feature/Rating 1 2 3 4 5 6 7 8 9 10 10+
Dependency on Founder Owner Driven Business Non-Executive Owner
Management Gaps in team Full Team with Experience
Systems Weak or Informal Established & Robust
Customers Few & weak relationships Many Strong Relationships
Suppliers High Dependency Secure Supplies
Financial Information Volatile Results Improving Trend
Marketplace Mature & ‘Me Too’ Growth Market
Competition Many Strong Competitors Defendable Niche
Workforce High Turnover Key Staff tied in
Growth Future Growth Limited Exciting Growth Options
Intellectual Property No Defendable IP Established IP
Regulation Regulatory Threats Market driven by regulation

0
1
2
3
4
5
6
7
8
Dependence on
Founder
Management
Client Base
Workforce
Suppliers
Financial
Performance
Competition
Growth
IP
Regulation
Identifying Scope for Improvement

15/07/2014
189
Moving The Multiple - Examples
Quality of Earnings
 Consistent Profits
 Upward Growth Trend
 Technology
 Own Product
 Proven R&D Function
Customers
 Get Contracts Signed
 Broaden the Base
 Develop Recurring Income Streams

15/07/2014
190
Which Features Matter Most in Your Business?
Criteria Weighting Rating
Dependency on Founder
Management
Systems
Customers
Suppliers
Financial Information
Marketplace
Competition
Workforce
Growth
Regulation
Others

15/07/2014
191
Challenges:
1. Developing an intellectual property strategy that
encompasses all types of IP
2. If left unprotected, a good invention or creation may be
lost to larger competitors that are in a better position to
commercialize the product or service at a more affordable
price, leaving the original inventor or creator without any
financial benefit or reward
3. Insufficient information on the relevance of IP in day-to-
day business
4. High costs associated with obtaining and enforcing IP
rights
5. Ensuring that the senior management team recognizes the
importance of intellectual property protection
Key Success Steps:
1. Review the businesses intellectual property, such as patents,
copyright, trademarks etc. on a regular basis
2. Maintain a high level of awareness of competitors, market and
technology trends
3. Adequate protection of a company's intellectual property is a
crucial step in deterring potential infringement and in turning
ideas into business assets with a real market value
4. Taking full advantage of the IP system enables companies to
profit from their innovative capacity and creativity, which
encourages and helps fund further innovation.
5. Effective IP management enables companies to use their
intellectual property assets to improve their competitiveness
and strategic advantage, a company's portfolio of IP must be
viewed as a collection of key assets that add significant value
to the enterprise
Growth Areas: Intellectual Property (IP)

Business Exit Planning – Summary
• A Structured Approach to preparing the business for exit over several
years
• Profit improvement plan is a key part
• Growth in reported profits takes time
• Work on the features that move the multiple
There is an alternative…..

THANK YOU FOR
LISTENING

Research & Development
Tax Credits & Patent Box
Innovators Day – 16 July 2014

www.mitchellcharlesworth.co.uk
A Brief History:
Mitchell Charlesworth Chartered Accountants and Business Advisors
has offices in Liverpool, Manchester, Warrington, Chester and Widnes.
In 1885 Charles Hackett Mitchell commenced practice in Liverpool. He
was joined in 1910 by Bernard Orton Bunting and the firm continued as
Mitchell & Bunting for many years at 27 Lord Street, Liverpool. During
the ensuing years there have been a number of mergers with other
local firms and subsequent to one of those mergers in 1976 the name
was changed to Mitchell Charlesworth. The firm is now one of the
largest locally based practices of Chartered Accountants and Business
Advisors in the North West with 16 partners and over 160 staff. In spite
of the considerable growth of the firm over the years, we maintain a
policy of personal service to clients and a genuine interest in their
affairs.
Introduction

Tax Team
Tax is one area of business management where only advice of the highest
technical calibre is acceptable. Anything less and you risk damage to your
reputation as well as losing out financially. Our tax team are experts in the field
of personal and corporate tax. Their sole aim is to ensure our clients don't pay
a penny more in tax than they need to.
Graeme Davies
Graeme has been providing taxation advice to companies, individuals and
trusts for ten years. He has extensive experience in advising companies and
stakeholders on many areas of tax including mitigating corporation tax liabilities
through pre year end planning, corporate structuring issues, remuneration
planning for employees and shareholders, general tax planning and exit and
succession strategies for owner-managers.
Introduction (cont’d)

Two main forms of tax relief for innovators
Research & Development Tax Credits
Patent Box
Politically popular tax relief
Proposed, implemented and enhanced by successive governments
HMRC approach
Patent Box – yet to be seen
R&D – specialist office, pushing at an open door!
Tax relief for innovators

SME or Large scheme
SME scheme more generous
SME scheme
Less than 500 employees, and either
Turnover < €100m, or
Balance sheet total < €86m
Large scheme
Everyone else!
R&D tax credits

SME scheme tax relief
Additional 125% deduction for CT purposes
Losses? 14.5% tax credit (up from 11%!)
An additional source of funding?
Large scheme
Additional 30% deduction for CT purposes, or
10% above the line tax credit
Loss making companies take note!
R&D tax credits

SME scheme tax relief – example 1
SME co taxable profits £300,000
Corporation tax liability - £60,000
Qualifying R&D expenditure - £100,000
Additional deduction (125%) - £125,000
Corporation tax saving - £25,000
R&D tax credits

SME co taxable profit - £50,000
Corporation tax liability - £0
Corporation tax saving - £10,000
Tax credit
Created a loss of £75,000, either
Carry forward to use against future taxable profits, or
Surrender for a payment from HMRC of £10,875
R&D tax credits

SME co loss – (£100,000)
Corporation tax saving - £0
Tax credit
Trading loss of £225,000, either
Carry forward to use against future taxable profits, or
Surrender for a payment from HMRC of £32,625
R&D tax credits

Qualifying R&D projects
“advance the overall knowledge or capability in a field of science or
technology where there is a scientific or technological uncertainty”
HMRC approach
The 4 questions!
What was the scientific or technological advance sought?
What were the scientific or technological uncertainties?
How and when were the uncertainties overcome?
Why was the knowledge not readily deducible?
R&D tax credits

Qualifying R&D costs
Categories of qualifying expenditure
Staff costs
Includes pension & NI
Externally provided workers
65%
Consumables used directly in R&D
Power, water & fuel used directly in the R&D
Computer software
Subcontracted R&D costs – 65%
R&D tax credits

Areas to be careful
Grant funding
Software
Routine modifications
Are you the subcontractor?
R&D tax credits

Overview
Elective 10% tax rate on certain profits from patents
Corporation tax only
Phased implementation:
60% FY 2013
70% FY 2014
80% FY 2015
90% FY 2016
100% FY 2017
Designed for SME’s?
Patent Box

Qualifying company
Holds qualifying IP rights
Holds an exclusive licence over qualifying IP rights
Held either of the above and is receiving income in the current
accounting period which relates to an event in an earlier accounting
period when the company was also a qualifying company
Development condition
Active ownership condition
Patent Box

Calculating the relief
Designed by Archimedes?
Two methods!
Standard method
Streaming method
I’ll keep it as simple as possible – I promise!
Patent Box

Standard Method (in short)
Find X%
Apply it to the profits
Take off the routine return to give QRP
Take off the marketing return to give relevant profits (RP)
Perform the calculation:
Easy, innit?
Patent Box

Streaming Method (in short)
Income and expenses are streamed to calculate profits derived from
patents exactly
Take off the routine return to give QRP
Take off the marketing return to give relevant profits (RP)
Perform the calculation:
Likely to give a better result if qualifying IP income has a better profit
margin!
Patent Box

Election
Election into regime must specify first AP it will have effect and be
made before the last date the return for that AP can be amended
Election out of regime must specify first AP it will have effect and be
made before the last date the return for that AP can be amended
Cannot elect into regime again for 6 years
Corporate partners make separate elections
Pre-patent claims
Can also elect into regime when a patent has been applied for but
not yet granted: both patent owner or licensee
Up to 6 years of allowances pre-grant of patent
Given in first AP that patent is granted
Patent Box

SME position
If your going to go through the process its got to be worth it!
Chicken or Egg?
Estimate likely savings over a given period and take it from there.
Patent Box

Twitter @MitCharlesworth Connect on LinkedIn Visit: www.mitchellcharlesworth.co.uk
Graeme Davies
0151 255 2300
Graeme.Davies@mitchellcharlesworth.co.uk

How Liverpool Business and
IP Centre can help you

Business and IP Centre Liverpool
National Network
From the first spark of inspiration ….
…..to successfully launching and developing a business
Information to start and grow your business

Services
Practical advice on Intellectual Property
Free access to business information resources
Enquiry service
Workshops and events
Networking area

Protect your idea
European Patlib Network
Practical advice and guidance on IPR
Assistance with prior art searches
Monthly IP clinics
IP events and workshops

Know your Market…
Guides
Market Research
Company Information
Standards Legislation
News

Guides
Industry Guides
Small Business Collection
Electronic Guides

Market Research
Comprehensive UK coverage International Consumer coverage
Global Industry and Technology

Text
Company Information
International manufacturers and suppliers
Global company
information
All UK registered companies
Mailing lists and UK company Information

News
Newsbank
Trade Journals
Onesource

Standards and Legislation
British Standards
HMRC Tariff
Westlaw
Lexis Library

Wifi ,printing and downloading
Free WiFi
Printing
Downloading

Thank you
ruth.grodner@liverpool.gov.uk

 “Q1 2013 showed the lowest ever level of use of
external finance by SME’s” – SME Finance Monitor, Aug ‘13
 “Access to finance is a “major barrier” to growth for
more than one in five small companies” – FT, Mar ’12
 “Less than one in five SME’s have attempted to
raise finance in the last year – with 40 per cent of
applications rejected” – RealBusiness, Sept ‘13
The problem

 Crowdcube is the world’s first and leading equity crowdfunding platform
giving entrepreneurs a new way to raise investment
 Fully authorised and regulated by the Financial Conduct Authority
The solution

Success so far
£28 millionfunded so far…
£250,000
largest single investment
+78,000
members
120+
£1.9 millionbiggest deal
£2,800
average investment
Successfully
funded deals
£180,000
average deal
Stage of Growth
By Category

Growth
Source: Beauhurst, UK Equity Investment Review 2013, February 2013
UK’s ‘Most Active Seed Investor’ in 2013
Beauhurst report stated Crowdcube has “dominated the
UK equity crowdfunding marketing since launch and was
responsible for 70% of crowdfunded deals in 2013.”
2012 2013 Growth
investment £2.2m £12.2 + 562%
deals 22 54 + 145%
average
investment
£1,800 £2,800 + 56%

Why do investors love us?
“Crowdcube is
a breath of
fresh air; it’s a
convenient,
easy-to-use
and makes
investing far
more
accessible.”
Rupa Gantra
Crowdcube Investor

 Leading the transformation of equity finance in the
UK and abroad
 Giving entrepreneurs a new route to finance
 Satisfying investor needs
Summary

Thanks! Questions?
Mike Royston - Business
Development Manager
@mike_crowdcube
Mike@Crowdcube
www.crowdcube.com

£86,000
TSB SMART Award...
... 6 months to raise
match

Supplier Management
s.ashcroft@brianfarrington.com
Why your Innovation
needs your Courage
Stephen Ashcroft BEng MSc FCIPS
@ProcureChange

How to manage IP issues
to protect your innovation
> Keep an audit trail
> Document the IP development
> Employees under control
> No contract without NDA in place
> Control presentations to 3rd parties
> Identify participants!

Key considerations
> Taking financial advantage
– licence or sell
> NDA with possible suppliers
> Get legal advice – control their costs
> Learn to negotiate
> Understand the contracts

Pragmatic advice
> How long before the IP can be
commercially used?
> Do you have a robust business
case?
> What will the whole process
cost?
> What expert advice and support
do you require? 251

Case study: salient points
> International design house
– designers
> SME who had the idea
> Design contract handed to SME
> Major negotiations
> Funding of design
> Proof of concept

@ProcureChange
Group: Risk in Procurement Network
Sign up to our e-newsletter
@ www.brianfarrington.com

Innovators' Day - Innovate, Protect & Prosper - 16 July 2014

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